2022 (7) TMI 861 - AT - Income Tax

Deduction u/s 80IB - Non filling of return of income before due date - HELD THAT - As relying on case M/S VANSHEE BUILDERS DEVELOPERS P. LTD. 2012 (12) TMI 1056 - ITAT BANGALORE the provisions u/s. 80AC of the Act requiring the assessee to furnish return of income before the due date specified u/s. 139(1) of the Act is mandatory and not directory. Therefore, we hold the assessee is not eligible for deduction u/s. 80IB(7) of the Act. For the AY 2008-09, the assessee filed its return of income on 20.3.2009 declaring an income of Rs.1,93,37,543 after claiming deduction of Rs.82,87,519 u/s. 80IB(7) - The facts for this year being identical with AY 2007-08, we hold that the assessee is not eligible for deduction u/s. 80IB(7) - During the course of haring, the ld. AR submitted that the assessee had made an application before the CBDT u/s. 119(2B) of the Act for condonation of delay in filing the return by the assessee. Accordingly, we direct the AO to decide the issue in accordance with law pursuant to the CBDT directions.

Summary

Issues:
1. Eligibility of the assessee to claim deduction u/s. 80IB(7) of the Income-tax Act, 1961 for AY 2007-08.
2. Eligibility of the assessee to claim deduction u/s. 80IB(7) of the Income-tax Act, 1961 for AY 2008-09.

Issue 1: Eligibility of the assessee to claim deduction u/s. 80IB(7) of the Income-tax Act, 1961 for AY 2007-08:

The assessee, a company engaged in hotel business, filed a return of income for AY 2007-08 claiming deduction u/s. 80IB(7) of the Act. The AO denied the deduction citing project approval granted by the Regional Director of Tourism instead of the Director General of Tourism. The CIT(Appeals) upheld the denial based on the late filing of the return, despite project approval. The assessee argued for condonation of delay, citing reasons beyond their control. The Tribunal referenced the case of Saffire Garments Vs. ITO, emphasizing the mandatory nature of filing returns within the due date specified u/s. 139(1). It was held that the assessee's failure to meet this requirement made them ineligible for the deduction u/s. 80IB(7) of the Act.

Issue 2: Eligibility of the assessee to claim deduction u/s. 80IB(7) of the Income-tax Act, 1961 for AY 2008-09:

For AY 2008-09, the assessee filed a return of income claiming deduction u/s. 80IB(7) of the Act. The facts being identical to AY 2007-08, the Tribunal ruled that the assessee was ineligible for the deduction u/s. 80IB(7) of the Act for this assessment year as well. Additionally, the assessee had applied for condonation of delay in filing the return before the CBDT under section 119(2B) of the Act. The Tribunal directed the AO to decide on this issue according to CBDT directions. Ultimately, both appeals by the assessee were dismissed for AY 2007-08 and AY 2008-09.

This judgment highlights the importance of adhering to statutory timelines for filing returns to claim deductions under the Income-tax Act, emphasizing the mandatory nature of such requirements. The decision underscores that failure to file returns within the specified due date can lead to the denial of deductions, regardless of the circumstances leading to the delay.